GE Earnings Are Not Enough for Investors

By Chris Lange Updated Jan 13, 5:25AM EST · Published Jul 22, 8:55AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

GE Earnings Are Not Enough for Investors — © Thinkstock

General Electric Co. (NYSE: GE) reported its second-quarter financial results before the markets opened on Friday. Despite seeing a solid beat on both the top and bottom lines, investors still did not feel that was enough, even though revenues were up 15% year over year.

The company said that it had $0.51 in earnings per share (EPS) on $33.5 billion in revenue. The Thomson Reuters consensus estimates were $0.46 in EPS on revenue of $31.76 billion. In the same period of last year, GE posted EPS of $0.31 and $29.32 billion in revenue.

Through the second quarter of 2016, GE has returned about $18 billion to shareholders, with roughly $13.7 billion of that from the share buyback plan.

[nativounit]

Jeff Immelt, chair and chief executive of GE, commented:

Investors are seeing the benefits of our portfolio transformation. The GE Capital exit plan enabled GE Capital to return $15 billion in dividends year to date, and our de-designation as a systemically important financial institution gives us more balance sheet flexibility. We will continue to invest in key growth initiatives such as GE Digital, while returning ~$26 billion to investors through buyback and dividends.

During this quarter, the company announced over $25 billion in orders and commitments at the Farnborough Airshow for GE and its partner companies.

Also in the second quarter, GE announced the acquisition of Doosan Engineering & Construction Heat Recovery Steam Generator business, which ultimately will expand its portfolio and offerings.

Immelt added:

The diversity and scale of our portfolio enabled the company to perform well despite a volatile and slow growth economy. We delivered $0.51 of earnings per share with strong execution in Power, Aviation and Healthcare that offset challenging environments in Oil & Gas and Transportation. We expect strong organic growth in the second half of the year and reaffirm our 2016 operating framework.

On the books, GE’s cash and marketable securities totaled $91.8 billion at the end of the quarter, versus $102.5 billion at the end of the previous year.

Shares of GE closed Thursday down about 0.6% at $32.59, with a consensus analyst price target of $33.36 and a 52-week trading range of $19.37 to $33.00. Following the release of the earnings report, the stock was actually down about 2.2% at $31.89 in early trading indications Friday.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.